The Capital Construction Fund (CCF) program was created to assist owners and operators of United States-flag vessels in accumulating the large amounts of capital necessary for the modernization and expansion of the U.S. merchant marine. The program encourages construction, reconstruction, or acquisition of vessels through the deferment of Federal income taxes on certain deposits of money or other property placed into a CCF.
CCF vessels must be built in the United States and documented under the laws of the United States for operation in the Nation’s foreign, Great Lakes, Short-Sea Shipping or noncontiguous domestic trade or its fisheries. Participants must meet U.S. citizenship requirements.
Operators of American-flag vessels are faced with a competitive disadvantage in the construction and replacement of their vessels relative to foreign-flag operators whose vessels are registered in countries that do not tax shipping income. The CCF program helps counterbalance this situation through its tax-deferral privileges.
Another goal of the program is to assist in the modernization and expansion of vessels used in the noncontiguous domestic trade and the Great Lakes trade. Companies utilizing the benefits of the CCF program represent a broad cross section of the U.S. maritime industry. They include, for example:
- Liner companies that operate containerships and other specialized vessels from the West Coast of the United States to points in the Far East and Hawaii and from Gulf and East Coast ports to Europe, South America and Africa;
- Tanker operators who deliver crude oil from the North Slope of Alaska to the U.S. mainland;
- Bulk vessel operators moving ore on the Great Lakes;
- Companies specialized in offshore towing and supply operations which serve oil drilling and production rigs off the coasts of the United States and in foreign waters;
- Operators serving Caribbean and Central American ports;
- Tug and barge operators that provide service between Pacific Coast ports and points in Alaska, on the river system in Alaska, and in the Gulf of Alaska;
- Cruise vessels and tug-barge operators providing inter- island service in the Hawaiian Islands;Operators providing ferry and passenger service on the Great Lakes; and
- Operators moving containers and Roll-on/Roll-off cargo in Short Sea Shipping trades
Thus, vessels constructed, reconstructed, or acquired under this program span a wide spectrum, including large containerships, Roll-On/Roll-Off vanships, barge-carrying vessels, and other general cargo vessels; crude oil and petroleum product tankers, sophisticated liquefied natural gas (LNG) carriers; self-unloading Great Lakes bulk carriers; tugs, barges, supply vessels, and ferry and passenger vessels.
The operators range in size from large, consolidated companies to partnerships and sole proprietors. They have one thing in common. They have found that the CCF program can lower the effective cost to a company of replacing or adding new vessels, significantly accelerate the time frame for accumulating capital for such purposes, and be utilized to pay existing indebtedness on vessels if it is a part of an overall building program.
The CCF program is the responsibility of two agencies within the Federal Government – the Department of Transportation’s, Maritime Administration and the Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA). The Maritime Administration administers the program with respect to vessels operated in the commerce of the United States other than in the fisheries. NOAA administers the program with respect to vessels operated in the fisheries of the United States.
Application instructions are contained in part 1 of the above regulations.
Parties interested in the program as it relates to fishing vessels should contact:
CCF Program, Financial Services Division (F/MB5)
National Marine Fisheries Service
1315 East West Highway
Silver Spring, MD 20910
or the NOAA Website